Setting up a label in the early 1990s was not complicated in principle. In practice it was a series of small, irreversible decisions — each one cheap on its own, collectively defining whether you would press five hundred copies and break even, or press a thousand and owe your distributor money for three years.
Registration and Identity
The first formal act was registering a company name, typically as a limited company through Companies House in Cardiff or London, which cost very little and established the legal entity that would appear on contracts. Many labels operated for months before bothering; they traded under a name, pressed records with that name on the label, and formalised the structure only when a distributor asked for invoicing details. The Registrar of Companies did not require you to be a label to register a company — you registered a trading entity, described its activity generically (often "music publishing and recording"), and the label identity came from what you printed on the vinyl.
Alongside the company, or sometimes before it, a label needed to register with the Mechanical-Copyright Protection Society — the MCPS. This was not optional. The MCPS collected and administered mechanical royalties, the payments due to a track's publisher every time a copy was pressed. The label was the party pressing copies; it therefore owed mechanical royalties to whoever controlled the publishing. If the label also controlled its own publishing — which small operations often tried to do — it would register with the MCPS as both a publishing member and a licensee, essentially paying a royalty from one pocket into another, but establishing the paperwork that kept the structure legitimate. Without an MCPS agreement, a pressing plant would sometimes still accept a job, but distributors and larger retailers increasingly required proof of clearance before they would take stock.
The Performing Right Society — the PRS — handled a separate right: broadcast and live performance. A label that also ran a publishing arm registered with both bodies. Labels that only pressed records and did not control publishing still needed to demonstrate they had licensed the publishing correctly before the MCPS would issue a pressing licence. In practice this meant a written agreement between whoever wrote the track and the label, specifying what percentage of publishing income went where.
Licensing: Masters and Publishing
The fundamental distinction that governed a label's finances was the difference between the master recording and the underlying composition. A label owned — or licensed — the master. The publishing was separate, and unless the label had specifically set up a publishing arm and taken an assignment of the copyright, the writer retained it.
For labels pressing primarily dance tracks where the writer and performer were the same person — a producer releasing their own material on their own imprint — the distinction was often handled informally. The producer signed a short-form licence agreement giving the label the right to press, distribute and sell the recording in a specified territory for a specified term. The label would pay a royalty against this licence, or sometimes pay a one-time fee for a limited pressing run. Many early imprints used what was effectively a pressing-and-distribution deal, where the label existed mainly as an administrative layer above the individual producer's output.
A slightly larger label taking in tracks from multiple producers needed more rigorous paperwork. A standard approach was a licence for a defined period — two to five years was common — covering a specific territory (typically the UK and Europe, with separate deals for the US and Japan negotiated later or not at all). The label kept a percentage of sales receipts after deducting mechanical royalties, pressing costs and distribution fees; the producer received the remainder as a royalty. Royalty rates for dance twelve-inches on small independent labels varied, but margins were thin across the board — the structure of the vinyl business meant that most parties made money on volume, and most independent dance labels pressed runs that made volume difficult.
Pressing Deals
By the late 1980s and into the 1990s, the main independent pressing plants serving the British market included Damont Audio in Middlesex, Orlake Records in Dagenham, and MPO, the French plant that handled significant volumes of European independent work. A label would approach a plant either directly or through a broker, negotiate a per-unit price based on run size, and supply a master lacquer or — increasingly as the decade progressed — a digital master on half-inch tape or DAT. The cut from the audio master to lacquer was typically done at a separate mastering facility: The Exchange in London, Loud Mastering, and similar rooms specialising in the specific requirements of dance music, where cutter head settings and groove spacing had practical consequences for how loud and how long a side could be.
The pressing deal typically required a minimum run — five hundred copies was common at the bottom end, though plants preferred a thousand. Labels paid on delivery or against thirty-day terms if they had established an account. A label without a distributor in place before pressing was taking a cash-flow gamble: records sitting in a warehouse generated no revenue and required storage.
Distribution
Distribution was where the money moved, and where many small labels stalled. Two broad models existed: one-stop distribution through a major rack distributor, or direct selling to independent retailers. One-stop or direct distribution carried its own logic — the one-stop reached more shops and required less administrative overhead, but took a margin of around twenty-five to thirty per cent and paid on sixty to ninety-day terms, sometimes longer. A label pressing a thousand units at a per-unit manufacturing cost and then selling through a distributor at that margin had very little room before the venture turned negative.
Direct deals with independent shops — particularly the specialist dance record shops in cities with active club scenes, shops like Black Market in Soho, Eastern Bloc in Manchester, or Hardknox in Leeds — offered a better margin but required the label to act as its own sales force, delivering stock by hand or by courier and chasing payment individually. Labels that operated both channels usually reserved white-label promotional copies for the direct shop route before pressing a full commercial run, using the retail response to gauge whether to press more.
Setting up a label in the early 1990s was not complicated in principle.
Publishing Splits and the Writer Share
Even a label that understood its distribution structure could be caught out by publishing. The MCPS mechanical rate in Britain was set as a percentage of the published price to dealer — the PPD, which was the wholesale price at which labels sold to distributors. For every unit pressed and sold, the mechanical royalty was calculated against this figure and owed to whoever held the publishing. On a twelve-inch selling at a PPD of roughly two to three pounds, the mechanical royalty was a matter of pence per side — modest individually, significant across a pressing run.
Labels that also administered publishing either established a separate publishing company registered with the MCPS, or affiliated with an existing publisher who would handle collection in exchange for a percentage of income. The latter arrangement — a sub-publishing deal or an administration deal — meant the label gave up a portion of publishing income but gained the administrative infrastructure to collect it correctly across territories.
Catalogue numbers mattered throughout all of this more than their format suggested. A well-structured cataloguing system made it possible to track pressing runs, licence agreements and royalty statements against specific releases — a twelve-inch numbered sequentially within a series could be tied to a specific MCPS licence, a specific pressing plant invoice, and a specific distribution statement without ambiguity. Labels that used ad hoc numbering found themselves unable to reconcile accounts when a release was licensed to a foreign territory or included on a compilation.
The entire infrastructure — MCPS membership, company registration, pressing deals, publishing splits, distribution agreements — was learnable, and the people operating it were often very young, working from flats in Sheffield or Dalston with a fax machine and a DAT recorder. What the structure rewarded was not sophistication but attention: the label that kept its paperwork straight, paid its mechanicals, and understood which costs came first would outlast the one that treated the legal layer as optional until a distributor invoice or a PRS enquiry made it urgent.